Today's Water-Logged And Getting Wetter Stock: Adobe Systems (ADBE)
Trade-Ideas LLC identified
(
) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Adobe Systems as such a stock due to the following factors:
- ADBE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $235.2 million.
- ADBE has traded 195,552 shares today.
- ADBE traded in a range 241.2% of the normal price range with a price range of $5.07.
- ADBE traded below its daily resistance level (quality: 13 days, meaning that the stock is crossing a resistance level set by the last 13 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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More details on ADBE:
Adobe Systems Incorporated operates as a diversified software company worldwide. Its Digital Media segment provides tools and solutions that enable individuals, small and medium businesses, and enterprises to create, publish, promote, and monetize their digital content. ADBE has a PE ratio of 55. Currently there are 10 analysts that rate Adobe Systems a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for Adobe Systems has been 2.5 million shares per day over the past 30 days. Adobe Systems has a market cap of $48.2 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.27 and a short float of 0.9% with 1.92 days to cover. Shares are up 3.8% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates Adobe Systems as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, impressive record of earnings per share growth and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 8.4%. Since the same quarter one year prior, revenues rose by 20.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ADBE's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, ADBE has a quick ratio of 2.09, which demonstrates the ability of the company to cover short-term liquidity needs.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Software industry and the overall market, ADOBE SYSTEMS INC's return on equity exceeds that of both the industry average and the S&P 500.
- ADOBE SYSTEMS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ADOBE SYSTEMS INC increased its bottom line by earning $1.24 versus $0.52 in the prior year. This year, the market expects an improvement in earnings ($2.87 versus $1.24).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 65.5% when compared to the same quarter one year prior, rising from $147.49 million to $244.07 million.
- You can view the full Adobe Systems Ratings Report.
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